Dr. Mohammed Amin Adam
Former Finance Minister, Dr. Mohammed Amin Adam, has cautioned that the restoration of the licence of GN Savings and Loans could undermine the country’s financial-sector credibility and weaken investor confidence if the process is perceived as politically motivated rather than driven by prudential regulation.
In a statement reacting to the Court of Appeal’s decision ordering the reinstatement of the company’s licence, Dr. Amin Adam expressed concern over comments by government officials crediting President John Dramani Mahama for the ruling.
According to him, the judgment is not merely a legal matter but “a major financial-sector policy event” with implications for regulatory credibility, macroeconomic stability and Ghana’s outlook after exiting the International Monetary Fund (IMF) support programme.
He noted that President Mahama had promised during the 2024 electioneering campaign to restore the licences of financial institutions he described as “wrongfully collapsed,” arguing that the political backdrop of the court ruling raises concerns about the intersection of politics, law and financial-sector regulation.
Dr. Amin Adam defended the 2017–2019 banking-sector clean-up exercise undertaken by the Bank of Ghana (BoG), saying the reforms were necessary because several banks and specialised deposit-taking institutions were struggling with weak capital bases, governance failures, related-party transactions and liquidity challenges.
He referenced IMF assessments and the PwC Ghana Banking Survey, both of which described the revocation of licences of insolvent institutions as necessary steps toward restoring confidence and stability in the financial system.
The former Finance Minister warned that reversing licence revocations years later without a fresh and transparent supervisory review could create dangerous precedents within the banking industry.
He outlined what he described as five major risks arising from the decision, including threats to regulatory credibility, moral hazard, fiscal stability, financial-system stability and the ncountry’s post-IMF reputation.
Dr. Amin Adam argued that if financial institutions begin to believe regulatory sanctions can later be overturned through political influence or court action, it could weaken discipline within the sector and encourage reckless management practices.
He further cautioned that similar claims by other collapsed institutions could expose the state to compensation demands, depositor liabilities and recapitalisation pressures at a time when Ghana still faces limited fiscal space following its IMF-supported economic recovery programme.
The former minister also stressed that any attempt to operationalise the restored licence must first be subjected to comprehensive prudential assessments covering capital adequacy, governance standards, liquidity, asset quality and depositor protection.
He warned that investors and development partners would closely monitor how the nation handles the matter, insisting that the durability of Ghana’s economic reforms would depend on institutional discipline rather than political considerations.
Dr. Amin Adam urged the BoG to publicly explain the regulatory implications of the ruling and indicate whether it intends to appeal the judgment.
He also called on the Ministry of Finance to disclose any potential fiscal exposure arising from the ruling, including possible compensation costs, receiver liabilities and recapitalisation obligations.
“Financial stability is not a campaign promise. It is a national asset,” he stated.
By Ernest Kofi Adu